Q. Gunjan Ltd. purchased a running business from Vrindavan Ltd. for a sum of Rs 25,00,000, payable by cheque and for the balance issued 8% debentures of Rs 100 each at 5% premium. The assets and liabilities consisted of the following:
Land & building - Rs 9,00,000
Plant & machinery - Rs 8,00,000
Patents - Rs 40,000
Sundry drs - Rs 7,00,000
Stock - Rs 5,00,000
Sundry crs - Rs 1,20,000
Record necessary journal entries in the books of Gunjan Ltd.
Dear Student,
(i) Land & Building.........................Dr. 9,00,000
Plant & Machinery.....................Dr. 8,00,000
Patents......................................Dr. 40,000
Sundry Debtors..........................Dr. 7,00,000
Stock..........................................Dr. 5,00,000
To Sundry Crs. 1,20,000
To Vrindavan Ltd. 28,20,000
(being business of Vrindavan Ltd. purchased)
(ii) Vrindavan Ltd......................Dr. 28,20,000
To Bank A/C 25,00,000
To Share Capital A/C (3,048*100) 3,04,800
To Securities Premium A/C (3,048*5) 15,200
( being payment made to Vrindavan Ltd.)
Note:- Amount of securities premium is rounded off as per the requirement
(i) Land & Building.........................Dr. 9,00,000
Plant & Machinery.....................Dr. 8,00,000
Patents......................................Dr. 40,000
Sundry Debtors..........................Dr. 7,00,000
Stock..........................................Dr. 5,00,000
To Sundry Crs. 1,20,000
To Vrindavan Ltd. 28,20,000
(being business of Vrindavan Ltd. purchased)
(ii) Vrindavan Ltd......................Dr. 28,20,000
To Bank A/C 25,00,000
To Share Capital A/C (3,048*100) 3,04,800
To Securities Premium A/C (3,048*5) 15,200
( being payment made to Vrindavan Ltd.)
Note:- Amount of securities premium is rounded off as per the requirement